Web3 Trademarks: Be Basic

With the rapid growth of the Web3 economy shaking up things across legal fields, it is not surprising that the registration of Web3 trademarks is raising novel issues. Web3 businesses should, of course, keep these issues on their radar when crafting brand strategies, but at the same time they must not neglect trademark basics.

Similarity to Other Marks

Section 2(d) of the Lanham Act prohibits the registration of a trademark “which so resembles a [registered] mark … as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive.” Perhaps the most important rationale for affording legal protection to trademarks in the first place is to give the consumer an assurance that a particular good or service belongs to an identified owner. This is true for all trademarks, whether they are Web3 trademarks or coffee trademarks.

When you walk into a Starbucks store, you want to know that you are walking into an establishment connected to the Starbucks Corporation, not some copycat set up by some guy in Venezuela. Given this concern, obviously it is not possible for anyone other than the Starbucks Corporation to register Starbucks marks, or marks that closely resemble them, for that matter.

This said, the Lanham Act clarifies that it is concerned with confusion, mistake, or deception caused by a mark when used on or in connection with an applicant’s goods. As a result, when addressing likelihood of confusion, USPTO looks not just at the similarity between the marks, but also the relatedness of the goods and services described. As a result, there might not be a likelihood of confusion between two identical marks, if the goods they describe are not related.

Consider the registration of the Ethereum mark in several classes (including alcoholic beverages and smoker’s articles) by a Ukrainian national. USPTO did not find a likelihood of confusion with the Ethereum marks registered by the Ethereum Foundation. On the other hand, the Ukrainian’s prior right was cited by USPTO when it denied an application to register the mark Ethereum Wines.

As the likes of Walmart and Coke go into Web3, the issue of relatedness will get trickier. A couple of years ago, a USPTO examiner might have easily determined there is no relatedness between big-box stores and soft drinks, on the one hand, and products like NFTs and cryptocurrencies, on the other—but now the question is more complicated.

Web3 Trademarks Must Be Distinctive

According to Section 2(e) of the Lanham Act, a trademark shall not be registered if “when used on or in connection with the goods of the applicant is merely descriptive.” This is true of all trademarks, not just Web3 trademarks. A bank cannot register the mark Bank, just as a cryptocurrency services company cannot register the mark Crypto.

This said, descriptiveness is relative. Hence that Lanham Act’s qualification that a mark may not be registered if it is merely descriptive “when used on or in connection with” an applicant’s goods. The term “bank” is not descriptive in any way of a coffeeshop, and so registering the mark Bank to describe coffeeshops should be fine. By the same token, USPTO had no problem registering the mark Bitcoin for alcoholic beverages and smoker’s articles to the same Ukrainian national who registered Ethereum (браво, друже!).

Use in Commerce 

Before they can be registered under U.S. law, Web3 trademarks must be used in use in commerce. Trademark owners can apply to register their trademark before it is used in commerce (on what is known as intent-to-use (ITU) basis), but registration will not be completed until use is established to the satisfaction of the USPTO. This must be done within three years of the USPTO’s preliminary approval of the application (known in USPTO jargon as “allowance”).

Businesses should be mindful of use-in-commerce requirements when designing their brand strategies. The timing of trademark applications is one variable: it makes no sense to file a trademark application if it is clear that, no matter what, the use in commerce requirement will not be met during the relevant period. Alternatively, product launch dates could be moved up on account of trademarking concerns.

It is also important to keep in mind that some jurisdictions do not have use in commerce requirements. While it might make sense to wait before filing a U.S. application, an application in the EU can proceed, for example.

Don’t Forget the Basics When Registering Web3 Trademarks

The bottom line is this: In most ways, Web3 trademarks are just like any other trademark. Web3 businesses should of course be aware of the sector-specific issues, but without neglecting the trademarking basics.

Read More